Should You Work With an Overseas Manufacturer?
You are looking to get started on manufacturing your own products and you know it’s going to be costly. The fabric alone is a huge investment. But then you get the price quote from domestic manufacturers that you have selected and you are like, “whoa, that’s going to cost quite a bit.” Yup it is. If you are producing domestically (made locally/made in the USA) this means you are going to be paying someone a living wage. Sounds fair, right?
But the cost is so much!
You start to compare what overseas manufacturers are offering and the prices are night and day! You want to get in on it and reap a huge profit margin, right? They make it sound like it will be so easy.
But you know the old saying, if it sounds too good to be true it probably is.
Here’s the thing, I’ve worked with overseas factories for most of my career and I’ve worked with lots of really, really good manufacturers that totally have it together, but I’ve also seen quite a lot…well…unique situations. Today I know what to look out for, but starting out there is no way to know.
But you are probably considering anyway because of that price… So let’s go on….
One of the most common situations is finding a factory online. More than likely, this factory is probably not a factory at all, rather an agent that reps a roster of different factories. Sometimes you are aware of this sometimes you are not. It’s usually handled on their end and you won’t know what’s up.
The agent says they will get your production made in the same facility that a top notch brand is produced. But let’s be real, Why would a gigantic factory that employs 200 workers and produces for Ralph Lauren want to take your order of 200 pieces? The truth is that they don’t. Sometimes small orders will be taken to fill the production schedule gaps and keep the workers busy while a big order is being prepared. It’s busy work. But more than likely your project will be farmed out to a much smaller subcontractor that has a small operation. That’s ok as long as they do a good job and there’s no sketchy stuff going on like workplace safety violations and child labor. More often than not, you have no way of knowing this is happening because your only contact with your product is through the agent.
Let’s be clear. Agents are not bad. They are needed by factories who need the work and to be the go-between with designers and factories. However, they don’t always understand the nuances of manufacturing and specific questions only the factory would know. For instance, if I wanted to get an inspection report of a production problem at the factory, they may not have any information and want to keep things moving to get paid so they tell the factory to ship instead of fix the problem.
Another consideration are your raw materials- fabric and trims. How are you planning to get that to the right place? Will your agent help to ensure it gets through customs? How will you verify that the factory has the correct materials that were shipped directly from your supplier? How do you know that the correct final product has been shipped? Are you prepared to deal with that headache? Or, would you trust them to choose the fabrics for you?
What I’ve described above may be an extreme situation, but it’s definitely something you would want to be aware of. You could luck out and find a small family owned operation that really wants to take on new brands, but since you will not see them in person keep the scenarios I have described in mind to make sure you are asking the right questions.
Are you truly ready for this?
Overseas factories don’t mess around. Taking your production overseas is like entering the Indy 500 where everyone is going a different direction. They aren’t going to hold your hand or putz around with fine tuning to make sure it is perfect for you. They want your little order in and out quickly so they can move onto the next. They will not be accommodating or they may keep pushing you to the back of the line if you are not ready. I’ve had more than my fair share of factories that took it upon themselves to start production without an approved fit because they didn’t want to lose a delivery or they had the production space open. I’ve had the luxury of leverage working for large retailers but you do not. They aren’t going to care about your feelings or your product. The only bargaining chip is money. Until you have serious volume with a factory you have no clout.
I promise, this isn’t a sponsored post for US manufacturing…
However, I’ve found that speaking the same language, being close to the same time zone and having the camaraderie of small business helping small business makes a huge difference. If you can’t get a reply to an email, you can easily call. If you need to you can hop on a plane and be at a factory within perhaps a few hours. Shipments will take only days as compared to weeks. Bonus- no import duties to worry about!
Adopting the right mindset no matter who you work with
We live in a global community and there are certain things that you will only find with overseas manufacturers. Everyone has their strengths.
Now, let me be VERY clear: Any overseas and/or domestic manufacturers should be your PARTNERS. Working with a factory isn’t like a car wash where you are in and out. Partnership takes a lot of time and energy. It will not happen on the first production run. There are some really good people out there. Finding the right factory is like dating. But a very expensive date if you are not mindful.
When I am asked to work with a new overseas factory for mass retail client, it’s a tough gig because we are all hoping for a relationship that can grow and we can all count on each other for years to come. It’s up to me to work with them and train them for compliance and understanding of what we need.
Sometimes I have to say the same thing 10 times with 10 different approaches to get someone to listen to what I need (I start with a calm professional email, but it can evolve to Tom Cruise jumping on Oprah’s couch level- crazy gets attention). Honestly I would say it takes a good two to three years of regular production runs to really get a fruitful relationship going for both parties. No matter how savvy each factory appears to be there will always be learning curves. You start to understand their needs and they understand yours. It’s not just about the product; they become family. If there is a problem with factory capacity or delivery issues, we all work together to solve it. It’s a true ecosystem where we all depend on each other.